FASB Proposals Amending Secur., Consol. Rules Will Be Out By Sept. 15
By Edith Orenstein, FEI Financial Reporting Blog - In a media advisory issued yesterday by the Financial Accounting Standards Board, “it expects to issue three separate but related Exposure Drafts [EDs] on or around September 15, 2008, for public comment.” The EDs will propose amendments to FAS 140 (Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities) and FIN 46R (Consolidation of Variable Interest Entities).
The issue of isolation and moreover the issue of a QSPE being 'passive' (which to some precluded or made more difficult the ability to modify loans - including subprime loans - in spite of calls for certain modifications to be made to help borrowers avoid default and foreclosure - was brought to the forefront during the recent subprime crisis.
In related news, the IASB announced yesterday updating info on its upcoming roundtables on amendments to its consolidation standards, including as relate to SPEs.
Read more on these developments here.